(Promulgated on Document Caifa [1994] No. 3 of the Ministry of Finance on Feb. 4, 1994)

Chapter 1    General Provisions
　　
Article 1 These Rules are formulated in accordance with the provisions of Article 19 of the "Provisional Regulations on Enterprise Income Tax of the People's Republic of China" (hereinafter referred to as "the Regulations").

Article 2 "Income from production and business operation" mentioned in Article 1 of the Regulations refers to income from material production, transportation and communications, circulation of commodities, labor service and income from other profit-making undertakings recognized by the financial departments of the State Council.

"Other incomes" mentioned in Article 1 of the Regulations refer to dividends, profits, rents, income from transferring assets, royalties and non-operating income.

Article 3 The "state-owned enterprises, collective enterprises, private enterprises, associated enterprises, and joint-stock enterprises" mentioned in (1) to (5) of Article 2 of the Regulations refer to enterprises that have been licensed and registered in accordance with relevant state regulations with the approval of relevant government departments..

"Other institutions that have income from production, business operation or other incomes" mentioned in (6) of Article 2 of the Regulations refer to undertakings and social organizations approved by and licensed and registered with relevant departments of the state in accordance with the law.

Article 4
"Enterprises and institutions with independent economic accounting" mentioned in Article 2 of the Regulations refer to taxpayers as enterprises or institutions that have opened settlement accounts with banks, built account books and make accounting statements independently and assume full responsibility for their own gains and losses.

Article 5 "The amount of tax payable" mentioned in Article 3 of the Regulations shall be assessed by this formula:
The amount of tax payable = taxable income X tax rate

Chapter 2    Computation of Amount of Income Tax Payable

Article 6  The formula for computing the income tax payable mentioned in Articles 3 and 4 of the Regulations is:
 Income tax payable = the total income - the sum of the tax-deductible items

Article 7 "Income from production and business operation" mentioned in (1) of Article 5 of the Regulations refers to the income from the taxpayer's principal business activities, including income from sales of commodities (products), income from labor service, income from business operations, the balance after the settlement of the building cost of a project is deducted, income from industrial operations and other business income.

 "Income from transfer of assets" mentioned in (2) of Article 5 of the Regulations refers to the income from the transfer by a taxpayer of assets of different types with compensation, including income from the transfer of fixed assets, securities, stocks and other assets.

"Income from interests" mentioned in (3) of Article 5 of the Regulations refers to the income from the interests of bonds and other securities the taxpayer has bought, interests on the loans lent to other institutions and income from other interests.
　　
"Proceedings from rents" mentioned in (4) of Article 5 of the Regulations refer to income in the form of rents on fixed assets, packaging material and rents on other assets.
　　
 "Royalties" mentioned in (5) of Article 5 of the Regulations refer to a taxpayer's income from the transfer or provision of patent right, non-patent technology, trade mark use right, copyright and other concessions.
　　
 "Dividends" mentioned in (6) Article 5 of the Regulations refer to the dividends and bonuses a taxpayer gets from his equities in other ventures.
　　
"Other income" mentioned in (7) of Article 5 of the Regulations refers to all other income in addition to those listed above, including inventory gains, income from fines, accounts payable but actually unpaid on account of the creditor, income from overage of material and cash, refunded educational surcharges, recovery of deposit warranty on packaging and other income.

Article 8 The "costs, other expenses and losses incurred for the income of the taxpayer" mentioned in Article 6 of the Regulations include the following:

1. Costs, i.e., the costs of production and business operation, referring to all of the direct and indirect expenses incurred in a taxpayer's production and management of commodities and the provision of service.

2. Expenses, i.e., the expenses a taxpayer spends on marketing (business operation), management and accounting involved in the production and management of commodities and the provision of services.

3. Taxes, i.e., the consumption tax, business tax, tax for municipal maintenance and construction, resource tax, land appreciation tax a taxpayer pays to the state in accordance with relevant regulations. Extra charges of education funds may be deemed tax payment.

4. Losses, i.e., the extraneous expenses for business operations, operational losses, investment losses and other losses.
　　
Should a taxpayer's financial and accounting practices be found at variance with the tax regulations, proper readjustment shall be made to bring them in line therewith. Deductions shall be permitted to be made from the taxable income wherever they are permissible in accordance with tax regulations.

Article 9 "Financial institutions" mentioned in (1) in paragraph two of Article 6 of the Regulations refer to all sorts of banks, insurance companies and non-banking institutions dealing in financial business with the approval of the People's Bank of China.

Article 10 "Interests" mentioned in (1) in paragraph two of Article 6 of the Regulations refer to the expenditure on interests of the loans that occurs after the final settlement for completion and commission of fixed assets built or acquired.
　　
"The interests which a taxpayer pays to a banking institution on a loan he has borrowed" mentioned in (1) in paragraph two of Article 6 of the Regulations include payments of interests of the loans owing to insurance enterprises and non-banking institutions.

The payments for interests other than those incurred during the construction and acquisition of fixed assets, the development and acquisition of intangible assets and the preparations for the establishment of a business shall be allowed for deduction, including payments for interests on mutual financing among taxpayers. The norms for such deductions shall be made in accordance with the provisions of (1) in paragraph two of Article 6 of the Regulations.

Article 11 "Taxable wages" mentioned in (2) in paragraph two of Article 6 of the Regulations refer to the wage standards allowed for tax deduction in computing the taxable income. It covers the basic wage and floating wage in all forms and subsidies, allowances and awards of all types paid to workers.

Article 12 "Payments by a taxpayer for public welfare or relief donations" mentioned in (4) of paragraph two of Article 6 of the Regulations refer to donations a taxpayer pays to public welfare undertakings of the educational and civil affairs departments and to victims of natural calamities and people in poor regions via social organizations or governmental institutions. Donations which a taxpayer grants a beneficiary directly shall not be deducted from the taxable income.
The "social organizations" mentioned in the previous paragraph include the China Youth Development Foundation, the Hope Project Foundation, Soong Ching Ling Foundation, the Disaster Relief Society, the China Red Cross, the China Handicapped Union, the All-China Aged Fund, the Society for the Promotion of the Old Liberated Areas, and other non-profit making organizations founded with the approval of the departments of civil affairs.

Article 13 "The other items shall be deducted in accordance with the relevant stipulations of the law, administrative decrees and other relevant state regulations on taxation" mentioned in paragraph three of Article 6 of the Regulations refer to relevant provisions for items for tax deductions of the laws adopted by the National People's Congress and its Standing Committee, the decrees and regulations promulgated by the State Council, the regulations on readjustments in tax collections in connection with taxation promulgated by the Ministry of Finance and the regulations promulgated by the State Administration of Taxation.

Article 14 Public relations expenses used for entertaining clients and customers in connection with production or business operations which a taxpayer has paid in keeping with the stipulations of the Ministry of Finance shall be deductible against solid records or invoices upon official approval.

Article15 Contributions a taxpayer pays to social insurance funds and mutual funds in accordance with the rules of the state, including employee's pension fund and unemployment insurance fund, shall be deductible within the prescribed ratio upon the approval of the tax authorities.

Article16 The premiums a taxpayer pays for property insurance and transportation insurance in keeping with the relevant regulations shall be deductible from taxable income. The no claim favor granted by an insurance company to a taxpayer shall be included in the taxable income of the year.
The premium of the personal safety insurance a taxpayer pays for workers of special types of work in accordance with the law shall be deductible from the actual taxable income.

Article17 The rents a taxpayer pays for the fixed properties he rents to meet the need for production or business operation shall be deducted from the taxable income in accordance with the stipulations below:

1. Rents of fixed assets in the form of operating lease shall be deductible by the actual amount.

2. Rents of fixed assets in the form of financing lease shall not be deducted directly. The commissions paid by the lessee and the interests paid after the completion of installation and delivery for use may be deducted directly at the time of payment.

Article 18 Reserves for bad accounts and for price cuts a taxpayer lays aside in keeping with the stipulations of the Ministry of Finance may be deducted from the taxable income.

Article 19 If a taxpayer who has not set up a bad accounts reserve suffers losses from bad accounts, he may report the case to the tax authorities and have the actual amount of losses from bad accounts deducted from the taxable income upon approval from the tax authorities.

Article 20 The expenses, losses or bad accounts which a taxpayer has already turned into accounts receivable shall be included in the taxable income when it is retrieved in full or partially in the coming year.

Article 21 The interests which a taxpayer obtains from the state bonds he has purchased shall not be included in the taxable income.

Article 22 Expenses arising from the transfer of fixed assets may be deducted from the taxable income.

Article 23 The inventory losses and/or net losses from damages incurred on a taxpayer's fixed assets in the current term may be allowed to be deducted from the taxable income upon examination of the inventory statement the taxpayer has provided and upon approval by the tax authorities.

Article 24 The value increment/decrement that occurs in the foreign currency deposit or loans in the course of production and business operation or in the settlements of current income and payment in a foreign currency resulting from the fluctuations of the exchange rates or the conversion of a foreign currency into the national currency in bookkeeping shall be accounted for current income or be deducted from the current taxable income.

Article 25 The administrative fees a taxpayer pays to the head office and those for the production and business operation of the taxpayer's enterprise may be deductible against the evidence furnished by the head office on the range, norm and assignment and methods of such fees and upon examination and approval by the tax authorities.

Article 26 The depreciation of fixed assets and the amortization of the intangible assets and deferred assets of a taxpayer shall be deducted in accordance with the relevant provisions of Chapter 3 of these Rules.

Article 27 "Capital expenditure" mentioned in (1) of Article 7 of the Regulations refers to the expenditure a taxpayer pays on acquiring and building fixed assets.

 "Expenditure on acquiring intangible assets and on development of new products" mentioned in (2) of Article 7 of the Regulations refers to those expenses sustained by a taxpayer for the acquisition or development of intangible assets which shall not be deducted directly. But the expenses on the development of the immature portion of an intangible asset may be deductible.
　　
 "Payments for fines and losses resulting from confiscation on account of illegal business operation" mentioned in (3) of Article 7 of the Regulations refer to the losses a taxpayer suffers from fines and/or confiscation of property on account of violations of the law, decrees and/or regulations
　　
"Fines for delayed tax payments, fines and penalties" mentioned in (4) Article 7 of the Regulations refer to the fines for delayed tax payment, and other fines imposed on a taxpayer for breaches of the taxation regulations and all other fines in addition to those fines on account of illegal business activities cited in the previous paragraph.
　　
"The portion of losses sustained from natural adversities or accidents which is entitled to compensation" mentioned in (5) of Article 7 of the Regulations refers to the compensations paid to a taxpayer from an insurance company on the insured assets that have suffered damages or losses from natural calamities or accidents.
　　
"The portion of payments for public welfare or relief donations and other donations in  excess of the permissible deductible norm defined by the state" mentioned in (6) Article 7 of the Regulations refers to donations beyond the norms and range prescribed in (4) in paragraph two of Article 6 of the Regulations and Article 12 of these Rules.

 "Expenditures on all sorts of supportive contributions" mentioned in (7) of Article 7 of the Regulations refer to donation expenses of non-advertising nature.
　
"Other expenditures irrelevant with the income" mentioned in (8) of Article 7 of the Regulations refer to all other expenses besides those listed above, which have nothing to do with the income of the enterprise.

Article 28 The "term for making up for the loss" mentioned in Article 11 of the Regulations refers to the loss which a taxpayer suffers in a certain taxable year and permissible to be deducted in the succeeding years; if the gains in one succeeding year is insufficient to make up for the loss of the previous year, the term may be prolonged up to five years and the succeeding five years after the loss making year, irrespective of gains or losses in those years, shall be the time limit for making up for the loss.

Chapter 3    Taxation Treatment of Assets

Article 29 By fixed assets of a taxpayer, it refers to houses, other buildings, machines, mechanic tools, means of transportation and other equipment, instruments and tools of a usage span of more than one year related with production and business operation. The articles of the major equipment unrelated with production and business operation, with the unit price of more than 2,000 yuan and a usage span of more than two years, shall also be deemed as fixed assets.
　　
Tools and apparatuses which are not treated as fixed assets may be treated as low-value consumable articles to be deducted from the taxable income once for all or by installment.
　　
By intangible assets, it refers to a taxpayer's assets of a long usage span that have no material form, including patent right, trade mark right, copyright, land use right, non-patent technologies, goodwill, etc.
　　
By deferred assets, it refers to those expenses that cannot be treated as the losses of the year but have to be amortized in the coming years, including, among others, founding expenses, and expenses on the improvements made to the rented fixed assets.
　　
By floating assets, it refers to assets that may be realized or used within a year or within an operational cycle longer than one year, including cash, bank deposits, inventory, accounts receivable and advance payments, etc.
Article 30 Valuation of fixed assets shall follow the principles below:
　　
1. A fixed asset completed and delivered by a building company shall be valued on the basis of the value defined in the inventory of the property handed over by the builder.

2. Valuation of the fixed asset made or built by the taxpayer itself shall be done on the basis of the actual costs that have occurred by the time of the completion of the project.
　　
3. Valuation of an acquired fixed asset shall be done on the basis of the price of the purchase plus the expenses on packaging, transportation, installation and tax. Valuation of a piece of imported equipment shall be done on the basis of the price of the purchase plus the import duties, expenses on shipment and other expenses in China.
　　
4. Valuation of a fixed asset leased in the form of financing lease shall be done on the basis of the price defined in the lease or contract plus the expenses on shipment, insurance on shipment, installation and adjustment, payment of interests and exchange losses prior to the commission of the equipment.
　　
5. A fixed asset received as a gift shall be valued on the basis of price of the asset indicated on the invoice plus the expenses the beneficiary enterprise has paid for the shipment, insurance, installation and adjustment; if there is no invoice attached to the gift, the gift shall be valued at the market price.

6. Valuation of fixed assets with inventory gain shall be done on the basis of the full price of a replacement of the same type of fixed asset.
　　
7. A fixed asset accepted as an investment shall be valued on the basis of the reasonable price defined in a contract or agreement in view of the degree of depreciation or at a price confirmed through proper appraisal.
　　
8. A fixed asset which has been renovated or expanded on its original basis shall be valued on the basis of the original price of the fixed asset plus the expenses on the renovation or expansion minus income from the appreciation of the fixed asset in the course of the renovation or expansion.

Article 31 Depreciation of fixed assets shall be handled in accordance with the stipulations below:　　
1. Depreciation shall be drawn from the fixed assets listed below:
(1) Houses, buildings,

(2) Machinery and equipment, transportation vehicles, articles and tools in use,

(3) Machinery and equipment seasonally suspended for use or stopped for overhaul,

(4) Fixed assets leased out in the form of operating lease,

(5) Fixed assets rented in the form of financing lease,

(6) Other fixed assets stipulated to be drawn for depreciation by the Ministry of Finance.

2. Depreciation shall not be drawn from the fixed assets listed below:
(1) Land,

(2) Fixed assets other than houses and buildings not in use, no need for use at the time or sealed off,

(3) Fixed assets rented in the form of operating lease,

(4) Fixed assets still in use with depreciation drawn sufficiently,

(5) Fixed assets subject to draws for maintenance and checkup expenses in accordance with relevant stipulations,

(6) Fixed assets formed after being written off as cost in one accounting entry,

(7)  The fixed assets of bankrupt or closed down enterprises,

(8) Other fixed assets defined as impermissible for depreciation by the Ministry of Finance
.
The fixed assets scrapped ahead of schedule shall not be depreciated.
　
3. The basis and methods for depreciation
(1) Depreciation of a taxpayer's fixed asset shall begin in the next month after it is put into use and depreciation shall stop in the next month after its use has ceased.

(2) An assessment of the scrap value of a fixed asset shall be made prior to the depreciation thereof begins and the scrap value shall be deducted from the original price of the fixed asset. The ratio of scrap value of a fixed asset shall be fixed by the enterprise itself within 5% of the original price and any readjustment thereof on account of special circumstances shall be reported to the tax authorities for the record.

(3) The method and term for the depreciation of a fixed asset shall follow the relevant state regulations.

Article 32 Intangible assets shall be valued separately on the basis of the actual prices thereof at the time of purchase:
1. An intangible asset an investor contributes as capital fund or condition for cooperation shall be valued on the basis of the assessed value or the value agreed upon in a contract or agreement.

2. An intangible asset acquired shall be valued on the basis of the actual price paid.

3. Intangible assets developed and owned through application in accordance with the law by the enterprise itself shall be valued on the basis of the actual expenses made in the course of the development thereof.

4. An intangible asset received in the form of a grant shall be valued on the basis of the price indicated on the invoice or the market price of its market counterpart.

Article 33 Intangible assets shall be amortized by the straight-line method.

An intangible asset acquired as a transfer or investment with the effective term and period of benefit defined separately by law and in a contract or the application by an enterprise shall be amortized by whichever is the shorter between the statutory effective term and the period of benefit defined in a contract or the enterprise's application. If no effective term is defined by the law, it shall be amortized in the period of benefit defined in a contract or the enterprise's application. If there is neither a statutory effective term nor a period of benefit defined in a contract or the enterprise's application, or it is an intangible asset developed by the user on its own, the term for amortization shall be no less than 10 years.

Article 34 The start-up costs of the preparatory period shall be deducted by installment in no less than five years beginning in the next month after the start of production or business operation.

The preparatory period mentioned in the previous paragraph refers to the period beginning on the day official approval is granted for the founding of the enterprise up to the commencement of production or operation (including trial production and trial operation). By start-up costs, it refers to the expenses incurred during the preparations for the enterprise, including the wages paid to the employees, office expenses, expenses on personnel training, expenses on travels on business, printing expenses, registration fees and exchange losses and payments on interests that are not included in the costs of fixed assets and intangible assets.

Article 35 The inventory of a taxpayer's commodities, materials, finished products and semi-finished goods shall be valued on the basis of the actual costs. The taxpayer may opt among these methods for the valuation of the actual costs of the inventory: first-in and first-out, last-in and last-out, last-in and first-out, weighted average, or moving average. Once an option is made, no further change shall be made at will. Where it is truly necessary, a change may be reported to the tax authorities for the record before the next tax calendar year begins.

Chapter 4    Tax Preference

Article 36 "Places of national autonomy" mentioned in (1) Article 8 of the Regulations refer to the autonomous regions, autonomous prefectures and autonomous counties under national autonomy in accordance with the "Law of the People's Republic of China on Regional National Autonomy".

Article 37 The people's governments of the provinces and autonomous regions shall grant tax reduction and exemption for a period of time so as to show regard with and encouragement to the local enterprises of the places of national autonomy in the light of the actual local conditions.

Article 38 "Tax reduction or exemption in accordance with the law, administrative decrees and relevant stipulations of the State Council" mentioned in paragraph two of Article 8 of the Regulations refers to laws adopted by the NPC and its Standing Committee, administrative decrees and regulations promulgated by the State Council and other relevant regulations of the State Council for tax reductions and tax exemption.

Chapter 5   Tax Allowance

Article 39 "The income tax paid outside China by a taxpayer" mentioned in Article 12 of the Regulations refers to the income tax paid by a taxpayer on the actual income he has obtained outside the territory of China. It excludes the gains from tax exemption or reduction or the reimbursement of the tax already paid or tax borne by others. However, if China has signed agreements with foreign countries on the avoidance of dual taxation, the provisions thereof shall be implemented.

Article 40 "The tax amount payable on its overseas income" mentioned in Article 12 of the Regulations refers to the tax amount payable on the taxable income resulting from an assessment of the balance of the income derived outside China after being deducted by the costs, expenses and losses amortized on the income in accordance with the relevant provisions of the Regulations and these Rules. The tax amount payable which serves as the limit to tax allowance shall be assessed by countries and regions but not by items. The formula for the assessment thereof is as follows:

 The limit to tax allowance on income derived outside China = the aggregate of the tax amount payable assessed on the basis of income derived in and outside China in accordance with the  tax law X (income derived from sources in a foreign land ÷ the combined income derived from sources both in and outside China)

Article 41 If the income tax paid by a taxpayer outside China on an income obtained outside China is lower than the tax allowance limit arrived at in accordance with the provisions prescribed in the previous passage, it may be deducted from the tax amount payable; if it exceeds the tax allowance limit, the portion beyond the limit shall not be deducted from the tax amount payable of the current year, nor written off as expenditure, but may be made up for with the favorable balance of the deductible amount of the following years, which in all shall be no longer than five years.

Article 42 In case the profit a taxpayer obtains from another enterprise on which the income tax has already been paid, the tax amount thereof already paid may be allowed for a readjustment in the assessment of the tax amount payable of the taxpayer-enterprise.

Chapter 6    Administration of Tax Collection

Article 43 The "local" in "a taxpayer shall pay enterprise income tax to the local tax authorities" mentioned in Article 14 of the Regulations refers to  where the taxpayer actually runs its business. For enterprises engaged in rail and air transportation or postal and telecommunications, the taxpayer's office in charge of the management and control of its business operation shall be responsible for paying income tax. The concrete procedure shall be formulated separately.

Article 44 "The favorable balance after the liquidation" mentioned in Article 13 of the Regulations refers to the balance of all of the assets or property of a taxpayer after  deduction by the liquidation expenses, losses, liabilities, undistributed profits, public welfare fund and public accumulation fund, i.e., the portion in excess of the paid up capital after liquidation.

Article 45 For enterprises that pay monthly or quarterly advance of income tax, the tax authorities shall assess the amount thereof on the basis of the actual tax amount payable.

Article 46 A taxpayer paying advance for income tax shall pay the actual amount of advances within the prescribed time limit. If there is difficulty in paying the actual amount of advances, it may pay each advance to the equivalent of 1/12 (monthly advance) or 1/4 (quarterly advance) of the tax amount of the previous year or in other ways of installment payment with the approval of the tax authorities. Once a method is chosen, no further change shall be made at will.
Income tax on income derived from abroad may be cleared at year-end.

Article 47 Should a taxpayer fail to file comprehensive and accurate evidences of income, costs and expenses or accurately assess the taxable income, the tax authorities is in power to assess the taxable income thereof.

Article 48 Regardless of gains or losses in a tax calendar year, a taxpayer shall file yearly income tax returns and accounting statements to the tax authorities within the prescribed time limit.

Article 49 During liquidation, a taxpayer shall file income returns to the local tax authorities before the cancellation of its registration with the authorities for industry and commerce.

Article 50 In case a merger, split or termination of a taxpayer takes place amid a tax calendar year, it shall clear its income tax payable with the local tax authorities within 60 days after it suspends production or business operation.

Article 51 As for "associated enterprises" mentioned in Article 10 of the Regulations, the qualifications thereof and the order and method by which the tax authorities makes readjustments in connection thereof shall be defined in accordance with the relevant provisions of the Law of the People's Republic of China on the Administration of Tax Collection and the Rules for the Implementation thereof.

Article 52 The "tax calendar year" mentioned in Article 4 of the Regulations refers to the period from January 1 to December 31of the Gregorian calendar.

If a taxpayer's actual time of operation is less than 12 months of the tax calendar year on account of starting operation in the middle of the year or because of merger or closing down the business, its operating period shall be deemed a tax calendar year.

In the event of liquidation of a taxpayer, the period of liquidation shall be deemed one tax calendar year.

Article 53 If the year-end final settlement of a taxpayer's income tax payment shows a shortage, it shall make up for it in the next tax year; and if the year-end final settlement shows a surplus, the surplus may be taken to offset part of the tax payment of the next year.

Article 54 The taxable income of a taxpayer shall be accounted for on the accrual basis.
A taxpayer's income from the following business operations may be assessed by intervals as a basis for assessment of the taxable income:
 　　
1. For commodities marketed in the form of accounts receivable collected by installment, the realization of the income from sales may be the date of payment of  the account payable by the buyer as provided by the contract; 　
　
2. For construction, installation and assembly projects and services provided that last for more than a year, the realization of the income thereof may be assessed on the basis of the progress of the work or the volume of work already completed.

3. For processing or making large machines and equipment, ships and other similar products for other enterprises and the projects last for more than one year, the realization of the income may be assessed on the basis of the progress of the work or the volume of work already completed.

Article 55 The commodities and goods produced by the taxpayer's own enterprise and used in capital construction, special projects and workers' welfare shall be accounted for as income. The material saved by the taxpayer from processing or assembly work with material provided by the client shall be accounted for as income if the processing contract provides that the saved material may be left to the processor.

Article 56 A taxpayer shall not leave out or repeat computation of any item that may affect the taxable income.

Article 57 The tax amount a taxpayer pays shall be accounted for in RMB. If the income is foreign currency and monthly or quarterly advances of income tax are paid, the tax amount payable shall be assessed by converting the foreign currency into RMB at the official exchange rate of the last day of the month (or quarter) (at the middle rate in principle, same hereinafter). In the year-end clearance payment of the tax amount, no more conversion shall be made on the foreign currency income on which monthly (quarterly) advances have been paid, only the portion of income in foreign currency on which tax has not been paid shall be assessed for the tax amount payable by converting it into RMB at the official exchange rate on the last day of the year.

Article 58 Should the income of a taxpayer be non-monetary assets or rights and interests, the income shall be assessed or valued at the market price of the time.

Chapter 7    Supplementary Rules

Article 59 The power of interpretation of these Rules rests with the Ministry of Finance or the State Administration of Taxation.

Article 60 These Rules shall go into effect as from the day of the promulgation of the "Provisional regulations on Enterprise Income Tax of the People's Republic of China". The "Detailed Rules for the Implementation of the Regulations (Draft) on State-Owned Enterprise Income Tax of the People's Republic of China", promulgated on October 18, 1984, the "Detailed Rules for the Implementation of the Provisional regulations on Collective Enterprise Income Tax of the People's Republic of China" promulgated on July 22, 1985, and the "Detailed Rules for the Implementation of the Provisional regulations on Private Enterprise Income Tax of the People's Republic of China" promulgated on 17 November, 1988, by the Ministry of Finance, shall be abrogated therefrom.

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